Finland’s Gasum officially ends pipeline deal with Gazprom

Finnish state-owned energy company Gasum has ended a pipeline natural gas supply contract with Russia’s Gazprom Export.

According to the company, Gasum had a long-term contract to buy natural gas from Gazprom Export, but in April 2022, Gazprom Export presented Gasum with a demand that the payments agreed in the supply contract should be paid in rubles instead of euros. Gasum did not accept this demand. In addition, the companies had a significant disagreement regarding certain other demands made based on the contract. Due to these reasons, Gasum referred the matter to arbitration in accordance with the supply contract.

In November 2022, the arbitral tribunal issued an award in the matter. According to the award, Gasum was not obligated to pay in rubles nor through the proposed payment procedure. Furthermore, the arbitral tribunal ordered Gasum and Gazprom Export to continue their bilateral contract negotiations to resolve the situation.

The negotiations between Gasum and Gazprom Export have now ended. The parties were not able to resolve the situation within the period defined by the arbitral tribunal and therefore, Gasum has terminated the long-term natural gas supply contract.

The parties will continue to finalize the details of the contract termination. Gasum will not comment on these details of the contract termination.

Gazprom Export ceased the pipeline natural gas deliveries to Gasum in May 2022 and there has not been any pipeline natural gas deliveries from Russia since then. The termination concerns only the pipeline gas supply contract. The long-term LNG supply contract Gasum has with Gazprom Export remains in place.